What aspect do emotional biases, such as self-control, primarily affect in investors?

Emotional biases, such as self-control, primarily impact how investors respond to market fluctuations and make personal investment choices. When investors experience emotional biases, their decision-making process can be swayed more by psychological factors than by fundamental analysis. For instance, a lack of self-control might lead an investor to react excessively to short-term market movements, causing them to buy or sell investments based on fear or greed rather than carefully considered strategies. This reaction can significantly alter their personal investment choices, potentially steering them away from a well-thought-out investment plan.

Additionally, emotional biases can lead to behavior such as overtrading, holding onto losing investments for too long, or selling winners too quickly—all responses driven by emotional reactions rather than rational deliberation. Therefore, the interaction between emotional biases and market dynamics is crucial for understanding investor behavior, especially in turbulent market conditions.